JPMorgan Chase, Citigroup and State Street have invested $11 million in Capitolis, a New York-based technology startup that seeks to help banks use capital more efficiently, the companies said. Capitolis expects its team to grow to 90 people by the end of the year from 50 at present.
Capitolis’ technology also allows banks to reduce the notional value of their derivatives portfolios by replacing multiple offsetting derivatives contracts with smaller residual trades. This frees up capital but is often done manually with spreadsheets and paperwork. To date the company says it has eliminated $5 trillion in overall positions for more than 50 financial institutions including JPMorgan, Citi and State Street. “We are happy to support them as they invest and build technology that helps free up capital creating greater efficiencies within the global markets industry,” Troy Rohrbaugh, Head of Global Markets at JPMorgan, said in a statement.